How RMDs Are Taxed

Ohio-based entrepreneur Jeffrey L. Wendel serves as the CEO of Wendel Retirement Planning in Fort Recovery. In this capacity, he meets with prospects and discusses their retirement needs. Jeffrey L. Wendel also wrote Grand Slam Retirement, and regularly teaches educational classes about taxes and required minimum distributions (RMDs) at local universities.

The IRS dictates that people must take RMDs from most tax-advantaged retirement accounts every year starting from the age of 72. Failure to do so results in a penalty of 50 percent on the amount that was not taken out. For instance, a person who has an RMD of $40,000 would be subject to a penalty of $10,000 if they only took out $20,000 from their retirement account during a particular year.

RMDs are generally taxed the same as ordinary income or distribution from a retirement account. They cannot be rolled over to a different retirement account in order to avoid paying taxes on them. Once the amount is taken from the account, the recipient must pay taxes on it.

However, it’s important that individuals understand the rules about which accounts they can take RMDs from. While these distributions are required of both traditional IRAs and 401(k)s, people can add up the total amount of RMDs required of all IRA accounts and take that amount from a single account. With 401(k) accounts, on the other hand, the necessary RMD must be taken from each account separately.

It’s also important to know that many Roth IRAs do not have RMDs. Distributions from these accounts are also generally tax-free, as long as a person is qualified to take distributions. Otherwise, the earnings withdrawn from an Roth IRA are taxable, while that person’s contributions are not.

Cincinatti Reds’ World Series History

Based in Fort Recovery, Ohio, Jeffrey L. Wendel has served as CEO of Wendel Retirement Planning for nearly 20 years. Beyond his professional activities, he is an avid sports fan. In addition to coaching baseball, Jeffrey L. Wendel supports local teams such as the Ohio State Buckeyes, the Cleveland Browns, and the Cincinnati Reds.

The Cincinnati Reds are one of the most storied franchises in the history of Major League Baseball (MLB). The Reds joined the league in 1882 and have amassed more than 10,500 wins. Cincinnati has won five world championships, the first coming in 1919. A best of nine series at the time, the Red claimed their first World Series title with a 5-3 series win over the Chicago White Sox.

The team made back to back World Series appearances in 1939 and 1940, getting swept by the New York Yankees and securing a second title with a one-run Game 7 victory over the Detroit Tigers, respectively. Between 1961 and 1972, Cincinnati reached three championship series but could not find a third title.

Cincinnati’s fortunes changed in 1975, a 108 win season capped off by a seven-game series win over the Boston Red Sox. The Reds won Game 7 by a score of 4-3. The series featured four extra innings and Boston scored one more run throughout the tightly contested series. The following season, Cincinnati defender their World Series championship, this time with a comfortable four-game sweep over the Yankees.

The franchise’s fifth and most recent World Series championship came in 1990, a sweep of the Oakland Athletics. Despite a one-run, extra-innings victory in Game, Cincinnati outscored the Athletics by 14 runs during the series.

Three Signs That Indicate You May Be Ready to Retire

Registered financial consultant, Jeffrey L. Wendel has managed almost $50 million in assets throughout his career. Jeffrey L. Wendel is the CEO and owner of Wendel Retirement Planning, where he works with clients and businesses to help them prepare for retirement.

Below are some milestones that could signal you are ready to retire:

1. You have paid off your home. As the most expensive asset for many people, their home is a significant source of debt. Paying off your home is not mandatory to retire, but getting rid of those mortgage payments is a great start.

2. You are ready to stop working. Work can be stressful, but it is also a source of fulfillment and dignity for many people. Keep in mind that once you stop working, you will suddenly have a lot more free time and you should have a rough idea of what you will do with that time.

3. You do not need to support anyone. If you are still the primary provider for your children and/or spouse, it may not be a great idea to retire yet. Again, no rule says you should not, but consider the financial burden that you will still be under.

Advantages of Working with a Retirement Planner

Jeffrey L. Wendel is the CEO of Wendel Retirement Planning if Fort Recovery, Ohio. As a registered financial consultant, Jeffrey L. Wendel has helped many clients in meeting their retirement needs.

Working with a financial planner gives you several advantages. First, you get the benefit of learning from someone who has years of experience helping other people who may be in the same boat as you. Besides learning about the basics of budgeting, you can also strategize to minimize expenses and maximize income.

Moreover, retirement planners have a wealth of knowledge in investment and asset allocation to protect and build your wealth long-term. Working with a planner puts an emotional buffer between you and your assets. Sometimes, it is difficult to make financial decisions on your own because you are personally invested in the outcomes. Ultimately, you gain peace of mind if you choose the right professional. A proven and time-tested planner will let you rest easy knowing your finances are well taken care of.